The Atlas of economic complexity: mapping paths to prosperity (original) (raw)
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The Atlas of Economic Complexity
2011
The research on which this Atlas is based began around 2006 with the idea of the product space. In the original paper published in Science in 2007, we collaborated with Albert-Laszlo Barabasi and Bailey Klinger. The view of economic development of countries as a process of discovering which products a country can master, a process we called self-discovery, came from joint work with Dani Rodrik and later also with Jason Hwang.
Reconciling contrasting views on economic complexity
Nature Communications, 2020
Summarising the complexity of a country’s economy in a single number is the holy grail for scholars engaging in data-based economics. In a field where the Gross Domestic Product remains the preferred indicator for many, economic complexity measures, aiming at uncovering the productive knowledge of countries, have been stirring the pot in the past few years. The commonly used methodologies to measure economic complexity produce contrasting results, undermining their acceptance and applications. Here we show that these methodologies – apparently conflicting on fundamental aspects – can be reconciled by adopting a neat mathematical perspective based on linear-algebra tools within a bipartite-networks framework. The obtained results shed new light on the potential of economic complexity to trace and forecast countries’ innovation potential and to interpret the temporal dynamics of economic growth, possibly paving the way to a micro-foundation of the field.
The building blocks of economic complexity
In ref. 4, Maddison presents GDP per capita measures for 60 countries since 1820. In that year, the ratio of the 95th to the 5th percentile was 3.18 but it increased to 17.82 by the year 2000. Today, the U.S. GDP per capita is Ͼ60 times higher than Malawi's. This article contains supporting information online at www.pnas.org/cgi/content/full/ 0900943106/DCSupplemental.
Measuring the Intangibles: A Metrics for the Economic Complexity of Countries and Products
PLoS ONE, 2013
We investigate a recent methodology we have proposed to extract valuable information on the competitiveness of countries and complexity of products from trade data. Standard economic theories predict a high level of specialization of countries in specific industrial sectors. However, a direct analysis of the official databases of exported products by all countries shows that the actual situation is very different. Countries commonly considered as developed ones are extremely diversified, exporting a large variety of products from very simple to very complex. At the same time countries generally considered as less developed export only the products also exported by the majority of countries. This situation calls for the introduction of a non-monetary and non-income-based measure for country economy complexity which uncovers the hidden potential for development and growth. The statistical approach we present here consists of coupled non-linear maps relating the competitiveness/fitness of countries to the complexity of their products. The fixed point of this transformation defines a metrics for the fitness of countries and the complexity of products. We argue that the key point to properly extract the economic information is the non-linearity of the map which is necessary to bound the complexity of products by the fitness of the less competitive countries exporting them. We present a detailed comparison of the results of this approach directly with those of the Method of Reflections by Hidalgo and Hausmann, showing the better performance of our method and a more solid economic, scientific and consistent foundation.
Economic Complexity: A Systematic Review of Literature
Desafio Online, 2020
This is a systematic review of the literature on economic complexity. We organize the most current and relevant research studies on the construction of the Economic Complexity Index and its empirical analysis. We searched "Economic Complexity" and its relative direct equivalent term "Economic Complexity Index", "Economic Growth", "Economic Development". The initial selection of the studies found 29 articles in a universe of 472. A total of 44 papers were obtained from Science Direct, 185 from Web of Science and 243 from Scopus. An important fact found in the review is that, since the more traditional empirical literature on the subject is still nascent, its application to regional realities is still nascent. This can be identified by the fact that in a significant universe of studies, only 5 presented proposals for methodological adaptation to the regional scope. In the literature, it is usually concluded that the productive structure of a country or region directly influences the level of growth, and high-income level is related to high complexity.
Product complexity and economic development
Structural Change and Economic Dynamics, 2012
We rank 5,107 products and 124 countries according to the measures of complexity. We find that: (1) the most complex products are in machinery, chemicals, and metals, while the least complex products are raw materials and commodities, wood, textiles, and agricultural products; (2) the most complex economies in the world are Japan, Germany, and Sweden, and the least complex, Cambodia, Papua New Guinea, and Nigeria; (3) the major exporters of the more complex products are the high-income countries, while the major exporters of the less complex products are the low-income countries; and (4) export shares of the more complex products increase with income, while export shares of the less complex products decrease with income. Finally, we relate the measure of product complexity with the concept of Complex Products and Systems, and find a high degree of conformity between them.
The Altas of Economic Complexity as an empirical breakthrough for Hirschman, Nurkse, Rosestein-Rodan, Singer, Lewis, Myrdal, Prebisch and Furtado
The dynamics of economic complexity and the product space over a 42 year period
2009
How does the productive structure of countries' changes over time? In this paper we explore this question by combining techniques of networks science with 42 years of trade data and find that, while the Product Space remains relatively stable during this period, the dynamics of countries' productive structures is characterized by a few highly dynamic economies. In particular we identify Brazil,
729 new measures of economic complexity (Addendum to Improving the Economic Complexity Index)
arXiv (Cornell University), 2017
Recently we uploaded to the arxiv a paper entitled: Improving the Economic Complexity Index. There, we compared three metrics of the knowledge intensity of an economy, the original metric we published in 2009 (the Economic Complexity Index or ECI), a variation of the metric proposed in 2012, and a variation we called ECI+. It was brought to our attention that the definition of ECI+ was equivalent to the variation of the metric proposed in 2012. We have verified this claim, and found that while the equations are not exactly the same, they are similar enough to be our own oversight. More importantly, we now ask: how many variations of the original ECI work? In this paper we provide a simple unifying framework to explore multiple variations of ECI, including both the original 2009 ECI and the 2012 variation. We found that a large fraction of variations have a similar predictive power, indicating that the chance of finding a variation of ECI that works, after the seminal 2009 measure, are surprisingly high. In fact, more than 28 percent of these variations have a predictive power that is within 90 percent of the maximum for any variation. These findings show that, once the idea of measuring economic complexity was out, creating a variation with a similar predictive power (like the ones proposed in 2012) was trivial (a 1 in 3 shot). More importantly, the result show that using exports data to measure the knowledge intensity of an economy is a robust phenomenon that works for multiple functional forms. Moreover, the fact that multiple variations of the 2009 ECI perform close to the maximum, tells us that no variation of ECI will have a performance that is substantially better. This suggests that research efforts should focus on uncovering the mechanisms that contribute to the diffusion and accumulation of productive knowledge instead of on exploring small variations to existing measures.
Brazilian Journal of Political Economy, 2018
This paper brings elements from the economic complexity literature to the discussions of the structuralist tradition on the central role of manufacturing and productive sophistication to economic growth. Using data provided by the Atlas of Economic Complexity this study sought to verify if countries’ complexity is important to explain convergence and divergence among poor and rich countries and, if so, which are the countries that will be able to reduce the income gap compared to developed countries. The econometric analysis revealed that exports and production complexity is significant to explain convergence and divergence among countries.